Magazine article Mortgage Banking

Nonresidential Building Holding Steady during First Half of 2007

Magazine article Mortgage Banking

Nonresidential Building Holding Steady during First Half of 2007

Article excerpt

Nonresidential construction posted neither gains nor losses during the first half of 2007, even as it made a giant leap during the month of June compared with the previous month, according to New York-based McGraw-Hill Construction's monthly survey of construction starts.

During the first six months of 2007, nonresidential building remained essentially steady compared with the same period last year, at an unadjusted rate of $105.9 billion. Total construction for the first half of the year was reported at $310.1 billion--down 14 percent relative to the same period the previous year, according to McGraw-Hill.

For June, overall construction starts advanced 8 percent to a seasonally adjusted annual rate (SAAR) of $662.4 billion, while June nonresidential building jumped 29 percent to $253.2 billion, seasonally adjusted.

Since mid-2006, the overall pattern for total construction has been shaped by the steep downturn for single-family housing, explained Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction.

"At the same time, part of the slack has been picked up by continued strength for nonresidential building and public works, and this was especially true in June as several very large projects boosted the nonresidential volume," said Murray. "It's still unclear whether single-family housing is close to reaching bottom, and with inventories of unsold homes at high levels and mortgage rates rising, a sustained upturn for single-family housing is not expected anytime soon. …

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